The Gazette 1971

specialisation is limited, sometimes non-existent. It might be possible to introduce the ideas of the •economist but only by massive interference and change in the structure of practice and the relationship of the profession with its clients. This would have consider- able social implications affecting the service now given by the profession to the public. In the absence of a system of adequate legal aid in civil and criminal mat- ters a large number of clients need legal service and advice and guidance not only on legal matters but over a wide field for which they cannot pay adequate fees. There is a social service element in legal practice which is particularly relevant in country areas. The fact must be faced that if the existing system of cross-subsidisation were abolished the State would have to provide many of the legal services, which the public demand, by means of direct legal aid in civil and criminal matters. This would inevitably create a different form of cross- subsidisation through payment for services from public monies which could be raised only by taxation. If, in the absence of cross-subsidisation by the profession or a comprehensive system of State aid many services were simply unavailable to a large sector of the public, who or what would fill the gap if solicitors de- clined all unremunerative work, as they would have to do in a strictly commercialised profession? No one has examined the alternatives to cross-subsidisation and it is not sufficient to condemn it without suggesting an alternative. The report of the English Prices and Incomes Board recognised it as an essential element in the economic and financial structure of legal practice. Fairness Cross-subsidisation is fair in its results. It is not un- reasonable that the wealthier client, particularly where property and money is passing, should pay more so that the less affluent can obtain legal services at a price within their means. This has been a characteristic of both the legal and the medical professions from time immemorial. Cross-subsidisation is recognised by the State itself and in statutory bodies such as C.I.E. and the E.S.B. It is well known that the profits from the bus service in Dublin are used to subsidise transport in country districts. It is also a feature of commerce and business. Supermarkets which are often quoted as a model of efficiency vary their prices continually runn- ing off some lines below cost and making up the profit on others. The E.S.B. supplies electricity to some citizens at or below cost while others are charged at a higher rate. It is thought that part of the fees paid by university students in low cost faculties is used to subsidise the high cost faculties such as medicine, dentistry and engineering which require expensive capital equipment. In fairness it must be said that the exact position in the universities cannot be established in the absence of detailed financial accounts. Enough has been said how- ever to demolish the theory that cross-subsidisation is intrinsically bad or indeed unusual. Cross-subsidisation in solicitors' professional fees was created by the State as these fees are fixed, not by the profession but by statutory bodies. Solicitors' fees in non-contentious business are regulated by orders made under the Solicitors' Remuneration Act 1881 and, in the case of litigation, by rules made by the various courts committees also operating under statutory powers. It is erroneous to suggest that the profession itself has created cross-subsidisation. In the experience of practitioners there is no general complaint from the public at large. The effect of cross-

subsidisation is reduced by the regressive element in the conveyancing fees and further by the spread of registration of title. As examples, in the case of con- veyances of unregistered land the commission scale fee falls away from 3.25% on the part of the considera- tion below £1,000 to 1% on the part of the con- sideration exceeding £10,000. In the case of fully regis- tered land the corresponding percentages are 2% and 0.37%. The system favours the public in underdeveloped areas where holdings are small and practice largely consists of numerous small transactions which could not bear the economic cost of the services. Solicitors more than any other profession must transact business for a widely varying clientele from wealthy companies to individuals with little means. Many transactions have great personal but little tangible property value, e.g. family and personal problems. It would be impossible to time-cost each case and charge on the basis of cost plus. A former Secretary of the Department of Justice, now deceased, once remarked to the writer of this article that as a matter of practical business the pro- fession must look for its remuneration where the resources exist. Commission scale fees The commission scale fee is a separate matter. Theoretically, commission scale fees could be designed which would produce over a particular class of business just sufficient to cover the costs plus reasonable profit on that specific business. It has been argued that, because it is geared to inflation, the commission scale fee enables solicitors to obtain an economic advantage not available to other sections of the community, that it produces excessive remuneration and that it is in- equitable that solicitors' fees on the commission basis should increase with inflation although the actual work involved remains the same. There must, however be some criterion. Other pro- fessions which have no statutory scales, have well- understood concepts as to the appropriate scales be- tween comparable offices and practices. The minimum time charges in many cases are much higher than the statutory time charges of solicitors. The increase in these other charges is continuous and progressive and has outstripped solicitors' fees. Commission scale fees are not peculiar to Ireland or to the solicitors' profession. In the U.S.A. even litigation is conducted on a com- mission scale fee system which is not permitted in Ire- land on professional grounds. The commission scale fee system was introduced to replace the old itemised system which encouraged multiplication of work and delay. It is more efficient in its operation. It is used by architects, stockbrokers, surveyors, commodity fac- tors, literary agents and commercial agents generally. Business generally protects itself against rising costs by fixing profit as a percentage on turnover as in the build- ing industry where the recognised rate of profit may be as high as 21% so that some builders' profits rise with wages and the price of building materials. It has also the advantage of uniformity, certainty and simplicity. The client can ascertain in advance his total financial commitment in a conveyancing mat- ter while on any other basis he cannot calculate his liability until the work has been completed and detailed bills of costs drawn and furnished. It is therefore a pro- tection against overcharging and it also has the advant- age of economy and speed in drawing bills of costs. The alternative under the present system is a bill of costs drawn under schedule 2 which requires the services of an experienced costs drawer. There is a great short- 173